By Sarah Bartlett
Cameron has allowed a European fiscal treaty to go ahead, but has said he will be watching it ‘like a hawk’.
A vote concerning the fiscal pact took place at an EU summit in Brussels, where 25 of 27 Eurozone countries agreed to sign the treaty designed to create a closer fiscal union in Europe. The agreement is set to allow tighter budgetary rules and aims to prevent excessive debts accumulating.
Under the treaty, the European Court of Justice will be able to enforce rules and impose fines on countries that do not comply with regulations. It also means the European commission will play a key role in scrutinising national budgets.
The Prime Minster had previously vetoed an outline of the fiscal treaty in December, and has said that he still has ‘legal concerns’ about the pact.
However, Cameron has said that the pact will not ‘place any obligations’ on the UK, and that he would only challenge the use of institutions ‘if national interests were threatened’. He claims that the treaty does not have the force of EU law.
Cameron said that it was extremely important that the agreement did not “encroach on the single market or the things we care about.” The accord will consequently go ahead without any objections from the UK, who will continue to regulate their own financial state, whilst the UK is to be an official observer in the negotiations.
The Czech Republic is the only other country to refuse joining the agreement, although they are committed to joining the Euro along with other new EU states.
Chancellor of Germany Angela Merkel was particularly keen to push forward the treaty to persuade her government that a debt crisis would not happen again. As the leading lenders in Europe, Germans needed reassurance that spending more money on their struggling neighbours would not be a waste.
Greek debt continues to put pressure on the Eurozone, although there is expected to be a definite agreement about Greece and its assets within the next few days.
Meanwhile, a general strike in Belgium took place during the summit highlighting public disapproval of austerity measures put in place by many European governments.
Cameron said he believed that the treaty would not solve the economic problems Europe currently faces. However, he did indicate that there were some positive steps towards economic growth and reducing unemployment in Europe.
The excess administrative costs and red tape that many European businesses face was discussed at length.
The Liberal Democrat party have praised the ‘policy of re-engagement’ in Europe and Lib Dem MP Simon Hughes conceded that the summit had been much more successful than the last one.
However, Labour leader Ed Milliband has accused Cameron of backtracking and called his previous block a ‘phantom veto’. Nigel Farage, leader of the UK Independence party stated “We have witnessed a U-turn by David Cameron on his previous stance of not letting those who have agreed to this new treaty use the various EU institutions.”
Cameron’s decision has also come under fire from his own Eurosceptic backbenchers who insist he has not been firm enough in his dealings with Europe. Tory MP Phillip Davies said “we don’t want David Cameron to go down the road of waving the white flag. This will define whether he’s seen as a Thatcher or a Major. If he caves in I’m afraid the comparison will be with John Major.”
It remains to be seen whether Cameron can maintain the UK’s relationship with the EU whilst tempering Conservative Eurosceptic sentiment. It seems unlikely that he will be able to sustain this balancing act.